Reference no: EM133419834
Assignment Rationale: Internal Equity established through Job Evaluation
The first part of building an effective compensation system for C3PO is to develop an internal pay structure that reflects the mission, values, and important goals of the organization. To do IT, you'll first need to review those. Then, we'll need to evaluate how those things that are most important to C3PO are reflected in the duties and responsibilities of different jobs and, subsequently, in the base pay offered for those jobs. The outcome of this process is a hierarchy of jobs at C3PO in order of the base pay that we offer for them.
Task 1: Compensation Strategy/Compensable Factors
By referring to C3PO's mission, goals, values, and key performance indicators, develop a list of compensable factors that C3PO is willing to pay for. Examples of such factors might be "responsibility for expansion efforts" (because we are trying to expand) or "responsibility for warehouse efficiency" (because the warehouse operations are so vital to our business success). Put your compensable factors in order from least important to most important. For an organization of C3PO's size, I suspect you'll have 5 - 10 factors, but you want to address, in general, all the most important parts of C3PO's mission and goals. However, you want to avoid having multiple compensable factors that measure the same thing. For example, you might have both "leadership responsibilities" and "impact of job" as compensable factors. Unless you have different definitions of these two factors, you may inadvertently award double the points to some managerial jobs for the same job duties. You must include thorough rationale explaining why you chose your compensable factors and why you considered some more important to C3PO than others.
Task 2: Point System
Develop a weighting system for your compensable factors by assigning a number of points available to each one. Make the total number of points available in your system some round number such as 500 or 1,000. Your point assignments should reflect the importance of those factors as described in Task 1. For example, you might have a 1,000 point system and have 6 factors that are worth 300, 200, 200, 100, 100, and 100 points, respectively.